water Article Equity vs. Efficiency and the Human Right to Water Manuel Prieto Departamento de Ciencias Históricas y Geográficas, Universidad de Tarapacá, Arica 1000965, Chile; [email protected] Abstract: One of the most crucial discussions within water resource management is the debate between those who defend the concept of economic efficiency and those who privilege notions of social equity. This tension is located at the core of binary categories that currently constitute the public debate within comparative water law and policy. These categories are commodity/human right, private property/common property, free-market/state regulation, and market value/community value. This paper explores this tension by studying how neoclassical economics understands ef- ficiency and tracing its rise as a key hegemonic principle for water resource management. I also present equity as a conceptual opposition to efficiency and describe its institutionalization through the human-right-to-water frame. A problematization of both the equity approach and the human- right-to-water frame follows. Finally, I propose a political ecology approach to better understand the tension between efficiency and equity and offer recommendations for informing the water research agenda on efficiency/equity. Keywords: water policy; equity; economic efficiency; human right to water 1. Introduction Citation: Prieto, M. Equity vs. In 1967, Maurice Kelso [1], alarmed by the lack of a market in Arizona that would Efficiency and the Human Right to facilitate water transfers from agriculture to highest value uses, wrote a pioneering defense Water. Water 2021, 13, 278. https:// for the commodification of water. In his opinion, water had become subject to what he doi.org/10.3390/w13030278 calls the “water-is-different syndrome”. By this concept, he meant that water had become imprisoned by several myths claiming it could not be privatized, was outside ordinary Academic Editors: Bruce M. Wilson, market mechanisms, and was priceless. In Kelso’s opinion, water is “not different” and Malcolm Langford and should be treated as an ordinary commodity. He argues that this statement is a fact that Rebecca Schiel can be objectively confirmed by experience and perspectives that defend the idea that Received: 12 December 2020 “water-is-different” are grounded in false judgments based on subjective beliefs. For Accepted: 21 January 2021 Published: 24 January 2021 Kelso, “subjective belief[s] about water [ ... ] are not nature-imposed imperatives but dictates of their own emotions which, also, if taken too seriously, can imperil society” [1], Publisher’s Note: MDPI stays neutral p. 177. What imperils society is that the “water-is-different syndrome” poses a serious with regard to jurisdictional claims in obstacle to optimum overall economic efficiency. In sum, for Kelso, water is objectively published maps and institutional affil- a commodity, while any other perspective is subjective and endangers efficiency and, iations. consequently, society. In Arizona, the same place where Kelso identified the “water-is-different syndrome”, the Tohono O’odham (Native American people of the Sonoran Desert (currently in the U.S. state of Arizona and the Mexican state of Sonora)) hold a ritual called the viikita every four years. The viikita aims to ensure copious rains and abundant water for Tohono Copyright: © 2021 by the author. O’odham crops. Observing this ritual and other collective practices carried out by the Licensee MDPI, Basel, Switzerland. This article is an open access article Tohono O’odham and by the Hispanic communities of the Southwest, Helen Ingram asserts distributed under the terms and that they constitute a form of collective power over water, illustrating what she calls the conditions of the Creative Commons “community value of water” [2]. The community value of water supposes a collective social Attribution (CC BY) license (https:// organization and management of water in order to ensure social equity. creativecommons.org/licenses/by/ Thus, Kelso and Ingram—two scholars studying the same phenomenon, water man- 4.0/). agement in Arizona, at the same university—arrived at radically different conclusions. For Water 2021, 13, 278. https://doi.org/10.3390/w13030278 https://www.mdpi.com/journal/water Water 2021, 13, 278 2 of 18 Kelso [1], the community value of water is a syndrome that threatens economic efficiency insofar as it impedes water flowing from Tohono O’odham agriculture toward highest value uses. However, for Ingram [2], the community value of water ensures social equity which, in fact, is threatened by utilitarian perspectives on economic efficiency that reduce the value of water to a price [3]. The above discussion illustrates an important tension within contemporary water resource management: the tension between the concepts of efficiency and equity. This tension is not isolated from other relevant discussions, and indeed it is at the core of the binary categories that currently constitute the debate within comparative water law and policy. These are commodity/human right, private property/common property, free market/state regulation, and market value/community value. This paper explores the basic tension between equity and efficiency. Following this introduction, the second section describes the neoclassical economics understanding of efficiency and demonstrates that this concept has become naturalized through a scientific perspective, moralized by a utilitarian approach, and institutionalized by the law and economics model. In what follows, I first explore how the idea of economic efficiency has become a key hegemonic principle for water resource management. Second, I analyze the main problems with the overemphasis on efficiency in water resource management. Third, I present the idea of equity as a conceptual opposition to efficiency and its institutionalization through the human-right-to-water frame. Fourth, I problematize both the equity approach and the human-right-to-water frame. Finally, I propose a political ecology approach for a better understanding of the efficiency/equity tension. This is followed by four recommendations for informing the water research agenda on efficiency/equity. 2. Economic Efficiency: What It Is, and How It Became Natural, Moral, and Institutionalized In simple terms, efficiency describes a situation where a certain level of utility (i.e., a measure of satisfaction) is reached by maximizing resources in the least expensive way possible. Under the basic assumption that utility can be measured objectively, orthodox economic theory stopped focusing on ordinal efficiency (i.e., where no other allocation of goods improves all agents) during the nineteenth century and adopted a model of cardinal utility (i.e., the satisfaction of a commodity allocation can be measured with a numeric value). This turning point allowed both interpersonal and aggregative measures of welfare and, consequently, comparisons between different states of society. Based on this assumption, the concept of economic efficiency became the hegemonic foundation for any collective action regarding economic regulation in general and natural resource policy in particular. The perspective of law and economics, replacing traditional standards of fairness and justice, uses the concept of economic efficiency as the primary standard for any legal decision, no matter if it is directly related to economic issues. Within this context, the Kaldor–Hicks potential compensation test is the dominant formulation used as a standard for cost-benefit analysis in policy prescriptions [4,5]. In brief, for heterodox economics, efficiency equals Kaldor–Hicks compensation. In this section, I will, first, explain the Pareto efficiency criterion as the base upon which the Kaldor–Hicks test is formulated, which is explained later. The influence of this efficiency imaginary has been significant for understanding both the post-Washington Consensus water reforms and critiques of them. The Washington Consensus is a set of neoliberal economic policy prescriptions for developing countries. The term refers to the level of agreement between Washington, D.C.-based institutions such as the International Monetary Fund, World Bank, and the U.S. Department of the Treasury. The prescriptions promote a free market and minimal state. For details, see Conca [6]. 2.1. The Efficiency Standards: Pareto and Kaldor–Hicks Pareto [7] formulated the most classic and influential conceptualization of efficiency. Interpreted in a broad sense, Pareto efficiency exists when no alteration in the current state of resource allocation in society could make at least one member better off without making Water 2021, 13, 278 3 of 18 someone else worse off. Consequently, Pareto improvement exists as long as winners in an allocation decision compensate the losers and retain a surplus. Translated into policy terms, at a social level, when the possibilities of making a Pareto improvement are zero, society is organized under an efficient model of resource allocation that cannot be modified without making someone worse off. However, legal changes inevitably produce winners and losers; they promote some members’ well-being at a cost to others. This situation is why, as formulated above, the Pareto criterion can only be a standard in an ideal society [5,8]. Pareto’s ideal scenario is transformed into a realistic one by the Kaldor–Hicks test. This test sees efficiency as a situation where no reallocation of resources could increase the total social welfare. In this sense, a Kaldor–Hicks